5. Below is the three-year bond real interest rate from 2000-2015. Explain why t

Question

5. Below is the three-year bond real interest rate from 2000-2015. Explain why the real interest rate is positive for most of the 2000s and what explains it being negative in 2008-2009 and 2010-2015. What explains the near-zero real interest rate in 2015? Assuming this interest rate was used to make loans, who benefits from interest rates post-2010? Figure 8.2: Thr 00-2015 ee-Year Bond Real Interest Rate: 20 5.0 4.0 3.0 2.0 1. REAL INTEREST RATE (PERCENT) 0.0 2.0 3.0 -4.0 5.0 2000 2002 2004 2006 2008 2010 2012 2014 Activate Windows YEAR

Explanation / Answer

It's a monetary policy in an economy government used to purchase the bond from the public so that they can increase the money supply in the market by providing money to the public in that time the rate of interest what the government is pain to the public is more insane the government has to sell the bones to the public the rate of interest is less in that way there maintaining the monetary monetary system in a in an economy.

0 real interest rate means the value of money is equal for the receiver and for the giver specially in terms of loan provided by the bank to the public.

As interest rate used to make loans so post 2010 publix where getting benefit as they have to pay less interest rate to the bank.

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